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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, 10 August 16
THE INDONESIAN DRAFT NEW MINING LAW - AMENDMENTS TO THE 2009 MINING LAW
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
Tuesday, 09 August 16
CS50 COAL INDEX HITS NEW FIFTY-WEEKS HIGH
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 1.78% week over week to averaging $41.85 per ton this past week, shows CS (i) C ...
Tuesday, 09 August 16
HARD COAL PRODUCTION AND WORLD TRADE ON THE DECLINE FOR THE FIRST TIME IN YEARS - VDKI
Hard coal production and world trade on the decline for the first time in years – not a harbinger of a global energy turnaround
Worldwid ...
Tuesday, 09 August 16
BREXIT, BRITANNIA AND THE WAVES - TREVOR CROWE, CLARKSON RESEARCH
This week, the Bank of England put into place its action plan following the UK referendum on 23rd June, which indicated the British population&rsqu ...
Monday, 08 August 16
INDONESIA'S DRAFT MINING LAW HINTS AT FUTURE REGULATORY FRAMEWORK
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
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- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- The University of Queensland
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
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