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