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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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Saturday, 11 July 09
THE IMPORT OF STEAM COAL FROM INDONESIA & S/A TO INDIA WILL CONTINUE TO INCREASE - VISTAAR
COALspot.com ( Singapore): Vistaar Shipping, an experienced ship operator in Singapore said, The market continued to be soft this with doubts a ...
Friday, 10 July 09
DMO AND ICPR AIMED AT SECURING DOMESTIC COAL SUPPLY
COALspot.com (Indonesia): According to website of DGCMG, the implementation of coal Domestic Market Obligation (DMO) and the Indonesian Coal P ...
Friday, 10 July 09
INDONESIAN MINING LAW IN TRANSITION
Further to the enactment of Law No. 4 of 2009 on Mineral and Coal Mining (“Law 4/2009”), the enactment of various implementing regulatio ...
Thursday, 09 July 09
COAL EXPORTS TO CHINA MAY FALL AS PRICES, SHIPPING RATES RISE
CHINA'S appetite for Australian coal may fall in July and August from earlier highs, due to a recent recovery in regional prices and higher interna ...
Thursday, 09 July 09
GARDA LISTS SHARES IN LOCAL BOURSE
Local coal company PT Garda Tujuh Buana officially listed its shares in the Indonesia Stock Exchange (IDX).
The listing followed the company's p ...
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- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Minerals Council of Australia
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
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