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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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Tuesday, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
Sunday, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
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- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Australian Coal Association
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Planning Commission, India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
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