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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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Tuesday, 05 May 09
INDONESIA'S ADARO PAYS $78.6 MLN FOR COAL-BARGING FIRM - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, said late on Monday it paid $78.6 million for a 74 percent stake in Orchard ...
Tuesday, 05 May 09
PHILIPPINES SEMIRARA STILL EXPECTS HIKE IN COAL SALES - BUSINESS MIRROR
DESPITE the anticipated soft demand resulting from the prevailing global financial crisis, the country’s largest coal producer Semirara Mining ...
Monday, 04 May 09
VISTAAR SINGAPORE SAYS, THIS MONTH DRY BULK FREIGHT LIKELY TO COME DOWN
COALspot.com (Singapore) - VISTAAR shipping Services Pte Limited of Singapore, said, the beginning of last week started with bit of weakness an ...
Monday, 04 May 09
PNOC-EC TO GROW COAL OPERATIONS - PHILIPPINE DAILY INQUIRER
LISTED firm Philippine National Oil Co.-Exploration Corp. plans to expand its operations this year to ensure the steady supply of coal and fur ...
Saturday, 02 May 09
BUMI'S FIRST-QUARTER PROFIT RISES 21% ON COAL PRICE - BLOOMBERG
PT BUMI RESOURCES, Asia’s biggest exporter of power-station coal, said first-quarter profit rose 21 percent after it earned higher prices for ...
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- Minerals Council of Australia
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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