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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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- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Planning Commission, India
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Australian Coal Association
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
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