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