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