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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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Thursday, 22 December 11
RI WILL NOT PLAY CATCH-UP WITH GLOBAL COAL DEMAND - THE JAKARTA POST
The Jakarta Post reported that, the International Energy Agency (IEA) has predicted in its Coal Market Report 2011 that over the next five years, gl ...
Thursday, 22 December 11
DRY BULK MARKET KEEPS LOSING TRACTION AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept retreating in the middle of the week, as charterers seem to be looking towards the holiday season and the start of the new ye ...
Tuesday, 20 December 11
THE COAL IMPORT INTO CHINA WAS QUIETER AS COAL STOCKS WERE AT HIGH LEVELS - BRS
The BDI ended the week at 1888 points (-1.8%), the BCI corrected to 3572 (-3.4%), the BPI was up at 1,775 (+3.6%), the BSI dropped to 1193 (-3.0%) a ...
Tuesday, 20 December 11
INDIA IMPORTS 66.41 PERCENT MORE COAL FROM INDONESIA LAST MONTH - SOURCES
COALspot.com: Indonesia, the world largest coal exporter, shipped 33.476* mln mt of coal in November, which is slightly higher than its Octobe ...
Monday, 19 December 11
KOPEX COMMITS ADDITIONAL ONE MILLION DOLLAR FOR PT TRANSCOAL MINERGY
COALspot.com - Mining contractor Kopex has agreed to extend a further US$1 million to finance the remainder of the expanded drill program at PT Tran ...
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- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- The University of Queensland
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
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