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