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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, 06 October 11
REALM SECURES 51% OF KATINGAN RIA COAL PROJECT IN CENTRAL KALIMANTAN
•Realm secures 51% of PT Katingan Ria Thermal Coal Project in Central Kalimantan
•Realm takes ownership of Kalres Limited
•Acquisit ...
Thursday, 06 October 11
SOUTH EAST ASIAS AGGRESSIVE POWER DEMAND GROWTH WILL REQUIRE INVESTMENT OF US$125 BN BY 2020 - WOOD MACKENZIE
COALspot.com - Wood Mackenzie says that South East Asia’s demand growth for new power generation is so aggressive that new power generation in ...
Thursday, 06 October 11
CHINESE DEMAND FOR COAL IMPORTS TO MODERATE IN 2012 - MISWIN MAHESH
COALspot.com - We expect Chinese demand growth for imported steam coal to moderate over the next year. Steam coal imports into China will modera ...
Wednesday, 05 October 11
MINISTRY STICKING TO RAW COMMODITY EXPORT BAN DESPITE INDUSTRY FEARS - JG
The Jakarta Globe, the one of the leading English news paper in Indonesia, reported that, the details of a controversial new regulation that would b ...
Wednesday, 05 October 11
ATLANTIC AND PACIFIC BASINS BECAME TIGHTER FOR PANAMAX LAST WEEK - BRS
A slump for both the Capes and Panamaxes sent the BDI down 1% this week, falling to 1,899 points.
The Capes saw the greatest movement, sliding - ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
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