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