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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, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
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- Interocean Group of Companies - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- White Energy Company Limited
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
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