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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, 17 November 11
DRY BULK MARKET INCHES FORWARD AND INTO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged higher yesterday, on the back of stronger demand for Capesize vessels and general improvement of sentiment on most of the ...
Thursday, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
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- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Planning Commission, India
- White Energy Company Limited
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