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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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Sunday, 18 March 12
BUKIT ASAM'S NET PROFIT IN 2011 ROSE 54% TO US$ 339.56 MILLION
COALspot.com - Company revenue for the period January - December 2011 amounting to Rp 10.6 trillion (approximately US$ 1,164,835,164.84) recorded an ...
Saturday, 17 March 12
THE FREIGHT RATES FOR INDONESIA TO INDIA REMAINED FIRM - VISTAAR SINGAPORE
COALspot.com - The market continued to be firm and all segments were up except for Cape Index which was down by 2.46 pct closing at 1,466 points.
...
Saturday, 17 March 12
INDIAN GOVT FINALIZES DRAFT BILL FOR COAL REGULATOR - PTI
The coal sector would soon get a regulator as the government has finalised a draft bill for the purpose, Coal Minister Sriprakash Jaiswal said Wedne ...
Friday, 16 March 12
THE PACIFIC MARKET IS FIRMING UP - FEARNLEYS AS
Handy
A slightly positive trend was seen last week in the Atlantic. Skaw-Passero deliveries fixed around USD 3k to US Gulf, while US Gulf deliveres ...
Thursday, 15 March 12
RAINS AVERAGE SELLING PRICE OF COAL WENT UP BY 22 % IN 2011
COALspot.com - PT. Resource Alam Indonesia Tbk, an Indonesian CCoW (3rd Generation) holder reported Wednesday a 171 percent increase in net profits ...
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- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
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