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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, 08 December 11
INDIA MAY SEE 41% ANNUAL GROWTH OF ITS COAL DEMAND DURING THE NEXT 5 YEARS - ICAP SHIPPING
India’s Ministry of Coal expects that India’s coal demand may face an annual 41% rise during the next 5 years, while its coal deficit is ...
Thursday, 08 December 11
HAREDA KRIDA GETS CONTRACT FROM BAYAN - INSIDER STORIES
Insider Stories reported that, coal miner PT Bayan Resources Tbk (BYAN), through its subsidiary dubbed PT Gunungbayan Pratamacoal (GPB), has signed ...
Thursday, 08 December 11
CAPESIZES LIFT DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize vessels yesterday helped lift the dry bulk market which had been falling since the start of the week on lower cargo demand. As a result the ...
Wednesday, 07 December 11
ABM INVESTAMA EYES RP6.3 TRIO REVENUE - INSIDER STORIES
Insider Stories reported that, an energy integrated company PT ABM Investama Tbk is eyeing a 1.5 folds increase in revenue this year from Rp4. ...
Tuesday, 06 December 11
DRY BULK MARKET ENDS RALLY, STARTS WEEK WITH FALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a series of increases which saw the dry bulk market’s benchmark, the Baltic Dry Index (BDI) increasing close to 1,900 points and rates o ...
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- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- The University of Queensland
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Planning Commission, India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
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