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