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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, 28 July 12
CAL 2013 COAL SWAPS ARE HIGHER COMPARED TO SEPT 2012 PRICES
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 0.47 percent on Friday (27 July 2012) closing DoD but lost 0.90 ...
Friday, 27 July 12
PACIFIC MARKET REMAINED FLAT - FEARNLEYS AS
Handy
The Atlantic market continued its downward trend from last week with what appears to be a summer lull across the board. A trip from the USG t ...
Wednesday, 25 July 12
BUKIT ASAMS H1 REVENUE JUMPED BY 13 PERCENT
COALspot.com - PT Bukit Asam (Persero), Tbk., the state owned coal miner's revenue in H1 2012, has jumped 13 percent to IDR 5.79 trillion (approxim ...
Wednesday, 25 July 12
BUMI RESOURCES MINERALS SECURED PINJAM PAKAI FOR ITS ZINC AND LEAD PROJECT
COALspot.com - PT Bumi Resources Minerals Tbk. ("BRMS" or "the Company") today reported that its 80% owned subsidiary, PT Dairi ...
Tuesday, 24 July 12
SHIP OWNERS WAITING FOR SHIP PRICES TO FALL FURTHER BEFORE MOVING IN MORE AGGRESSIVELY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the summer season already well under way and many ship owners getting ready for the autumn, the sale & purchasing activity of second hand v ...
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- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
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