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