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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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Thursday, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
Tuesday, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
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- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
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- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
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- Indika Energy - Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Australian Coal Association
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Central Electricity Authority - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
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