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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, 25 November 20
DRY BULK SHIPPING: CHINA REMAINS THE DRIVING FACTOR, BUT COAL POLICY IS DISRUPTING THE MARKET - PETER SAND, BIMCO
The second half of the year has provided some cheer for the dry bulk market, with all ships in the spot market averaging earnings above the break-e ...
Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
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- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- White Energy Company Limited
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
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