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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 January 20
BALTIC BRIEFING TANKER REPORT - WEEK 2
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Friday, 10 January 20
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Thursday, 09 January 20
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Thursday, 09 January 20
INDIA'S NEW EASED MINING RULES TO ENHANCE FOREIGN PARTICIPATION IN COAL SECTOR: MINISTER
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- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- MS Steel International - UAE
- Australian Coal Association
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
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