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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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Wednesday, 01 February 12
2% OF IBPS TOTAL CONCESSION AREA CONTAINS TOTAL COAL RESOURCE OF 56.1 MILLION TON
COALspot.com - PT. Britmindo, a mine consulting firm, has finalized PT. Insani Bara Perkasa (IBP) first JORC (Joint Ore Reserves Committee) res ...
Tuesday, 31 January 12
THERE ARE MANY GOOD REASONS FOR COAL IN GERMANY - DR CIESLIK
COALspot.com - "The year 2011 was again marked by many changes on the markets and energy policies, at times in line with expectations, but at o ...
Tuesday, 31 January 12
DRY BULK MARKET KEEPS FALLING FOR WORST MONTH IN YEARS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn't manage to put a halt in its downfall, with the industry's benchmark, the BDI (Baltic Dry Index), posting yet another fa ...
Monday, 30 January 12
CHINA'S HUNGER FOR COAL LEAVES DENT IN PENNSYLVANIA'S SUPPLY - THOMAS LESKIN
With the price of heating oil on the rise, one of Pennsylvania's greatest natural resources - coal - is in high demand, and not just locally.
Et ...
Saturday, 28 January 12
WILL FREIGHT MARKET STABILIZE FROM NEXT WEEK?
COALspot.com - The markets continued to soften with BDI at 663 points down by 15.78 pct closing at 726 points and cape index was down by 5.73 pct cl ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- PTC India Limited - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
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