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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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Thursday, 12 August 10
ETA STAR INDIA PUTS FORWARD COAL MINING PLAN FOR TETE, MOZAMBIQUE, IN 2011
ETA Star India Projects Pvt, which is carrying out coal prospecting and surveying work in the Moatize coal region, in Tete province, will present it ...
Thursday, 12 August 10
SUPRAS WERE FIXED IN THE MID/HIGH TEENS FOR INDO-INDIA TRIPS - FEARNBULK
Handy
Activity is gradually picking up in the Atlantic with more enquiries seen for short period tonnage for the end of August. With the grain sea ...
Thursday, 12 August 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 94.86 FOR AUGUST 2010 SUPPLIES
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Wednesday, 11 August 10
BRAZILIAN GIANT VALE LOOKING TO BOOST ITS COAL OUTPUT
BRAZILIAN mining giant Vale is not content with being the world's largest iron ore miner. The miner is banking on ambitious growth plans to see it ...
Wednesday, 11 August 10
CAPESIZE MARKET ON RECOVERY MODE
The dry bulk market, usually dormant in August, has returned on a high note this week, after last week’s gains. Monday proved to be rather buo ...
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- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Economic Council, Georgia
- Marubeni Corporation - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
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