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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, 23 June 10
WILHELMSEN SHIPS SERVICE OPENS NEW OFFICE IN KRISHNAPATNAM PORT INDIA
Wilhelmsen Ships Service has opened a branch office in Krishnapatnam port on the east coast of India according to statement released by company ...
Wednesday, 23 June 10
PTC'S INDONESIAN COAL-MINING FORAY-I: TO INVEST USD 69 MILLION VIA OVERSEAS SPV
Moving ahead with its plans to acquire coal assets abroad, the power trading major, PTC India Limited, has decided to invest a total of USD 69 milli ...
Tuesday, 22 June 10
INDIA HAS REPORTED MORE COAL IMPORTS FROM COLOMBIA
A second consecutive week of sharp corrections for the dry bulk market, although some of the softness could be attributed to Chinese holidays at the ...
Monday, 21 June 10
THE SUPRAMAX INDEX IN THE FAR-EAST (S6 ROUTE) WAS DOWN BY $ 1300 PER DAY - VISTAAR
COALspot.com: The market continued to soften in all sectors last week also with the BDI dropping by 18.07 pct and Cape index by 26.71 pct.
The BD ...
Sunday, 20 June 10
OUR COAL: ITS DEVELOPMENT AND CONTROVERSIAL ISSUES
Indonesia’s production of coal has been growing amazingly. In the mid 1980s, national coal production was less than 1 million tons per annum, ...
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- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
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