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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, 06 April 12
DRY BULK MARKET SWIFT TO HALT FALL ON RENEWED DEMAND FOR CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk managed to put a stop to the recent falls, which came as a result of a lacklustre demand for smaller vessel sizes. Although this trend ...
Thursday, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , ex ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
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- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Parliament of New Zealand
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- White Energy Company Limited
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
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