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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, 02 February 11
HUGE TONNAGE OVERSUPPLY LOOMING FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market taking another dive yesterday, to just over 1,000 points (1,084), losing more than 2% on the day, it’s more than obvi ...
Monday, 31 January 11
S. SUMATRA COAL RAILWAY TO BE COMPLETED ON SCHEDULE - THE JAKARTA POST
The Jakarta Post reported that, despite land acquisition problems, state coal mining company PT Bukit Asam is upbeat that the development of a railw ...
Monday, 31 January 11
COAL MINER PTBA TO DRIVE OUTPUT WITH ACQUISITIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, State coal company Perusahaan Tambang Batubara Bukit Asam said its output would increase 34 percent to 17.6 million ...
Saturday, 29 January 11
PRESSURE ON SHIPPING MARKET MAY CONTINUE UNTIL MID FEBRUARY 2011
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1370 points.
In May 2010 the BDI touched 4,209 ...
Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
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- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
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