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