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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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Friday, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Planning Commission, India
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- White Energy Company Limited
- Mjunction Services Limited - India
- PTC India Limited - India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
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