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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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Tuesday, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- The University of Queensland
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- PTC India Limited - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
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