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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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Monday, 16 January 12
BUMA MINED 2.7 MILLION TONS COAL LAST MONTH
COALspot.com - BUMA has mined 2.7 million tons (-14.1% YoY) coal last month and removed 25.8 million bcm (-5.6% YoY) overburden, according to compan ...
Sunday, 15 January 12
THE FREIGHT MARKET CONTINUED TO BLEED - VISTAAR
COALspot.com - "The markets continued to bleed with BDI touching almost 1000 points , almost reaching the collapse of 2008 levels," said C ...
Saturday, 14 January 12
GOLDEN MINES TO SUPPLY 4 MIO TONS - INSIDER STORIES
Insider Stories reported that, Coal miner under Sinarmas Group PT Golden Energy Mines Tbk (GEMS), a subsidiary of PT Dian Swastatika Sentosa Tbk (DS ...
Friday, 13 January 12
DIFFICULT START OF 2012 FOR DRY BULK MARKET SEEN HARD TO CHANGE IN THE COURSE OF THE YEAR, UNLESS DEMOLITION PICKS UP
The dry bulk market has been on a freefall this week after a rocky start to the new year. Yesterday, the BDI (Baltic Dry Index) the industry's benc ...
Thursday, 12 January 12
DRY BULK MARKET CRASHING AT START OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept being on freefall mode yesterday, with the industry's benchmark, the BDI (Baltic Dry Index) losing a massive 5.17% on ...
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- Central Electricity Authority - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- The University of Queensland
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
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