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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, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
Wednesday, 14 December 11
MINER TOBA BARA SEJAHTRA PLANS IPO IN 1ST HALF OF 2012 - THE JAKARTA GLOBE
The Jakarta Globe reported that, Coal miner Toba Bara Sejahtra is aiming high next year, hoping to capitalize on renewed bullish sentiment in the lo ...
Wednesday, 14 December 11
TIMAH PLANS TO BOOST ITS COAL PRODUCTION TO TWO MILLION TONS PER ANNUM - SOURCES
COALspot.com - Timah plans to boost its coal production to two million tons per annum. The company also expects to acquire coal concession with mini ...
Wednesday, 14 December 11
BORNEO RESOURCE INVESTMENTS LTD. FINALIZES ACQUISITION OF INTEGRA PRIMA
COALspot.com - Borneo Resource Investments Ltd., announced that it has finalized the acquisition of an additional 1,300 hectare coal mining concessi ...
Tuesday, 13 December 11
BERAU COAL SCOUTS US$1.61 BIO SALES - INSIDER STORIES
Insider Stories reported that, coal mining company PT Berau Coal Energy Tbk (BRAU), that is 85% owned by London-listed company Bumi Plc, estimates a ...
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- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Planning Commission, India
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
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