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