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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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Tuesday, 24 January 12
BUKIT ASAM FY11 NET PROFIT SURGES 50% - INSIDER STORIES
Insider Stories reported that, the state-controlled PT Bukit Asam Tbk (PTBA) estimated to book Rp3 trillion (approximately US$ 335,570,469) net prof ...
Sunday, 22 January 12
FREIGHT MARKET DROPPED TO THE LOWEST LEVEL SINCE 2008
COALspot.com - "The markets continued to soften almost reaching 2008 levels breaking the 1,000 point mark", said Capt. Reddy of Vistaar Sh ...
Saturday, 21 January 12
ASIAS PREMIER COMPREHENSIVE OPEN CUT MINING CONFERENCE SCHEDULED FOR FEBRUARY 2012
As the only such conference in the region for miners and service providers, IBC Asia’s Open Cut Mine Planning & Operational Excellence con ...
Saturday, 21 January 12
COAL MARKETS CELEBRATES A DECADE OF BRINGING BUYERS & SELLERS TOGETHER
In 2012, IBC Asia’s premier Coal Markets conference series – Asia’s only globally focused coal import, export and supply chain eve ...
Saturday, 21 January 12
SAMIN TAN COMPLETES BUMI PLC TAKEOVER - INSIDER STORIES
Insider Stories reported that, Indonesian coking coal miner PT Borneo Lumbung Energi & Metal Tbk (BORN), that is controlled by stellar businessm ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- ASAPP Information Group - India
- Australian Coal Association
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
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