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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, 06 September 11
SEMEN GRESIK TO ACQUIRE COAL MINE FOR RP. 1 TRILLION
COALspot.com - PT Semen Gresik Tbk (SMGR) is planning to acquire a low calorific value coal concession (IUP). According to Semen Gresik, the coal mi ...
Tuesday, 06 September 11
DRY BULK MARKETS RALLY POWERS THROUGH TO NEW WEEK, BUT A CORRECTION COULD BE OVERDUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s freights rates kept leaping forwards during the beginning of the week, with the industry’s benchmark, the Baltic D ...
Monday, 05 September 11
TNPL POSTPONES BID OPENING UNTIL 12 SEPTEMBER 2011
COALspot.com - TNPL has postponed submission of the offer until 12 September 2011 on request from the supplier, an Indian trader said.
Due to Ram ...
Monday, 05 September 11
INDONESIAN COAL BENCHMARK PRICE - ANALYSIS
Analyst : Sunil K Kumbhat
COALspot.com - As a part of the Government’s efforts to stop transfer pricing abuses which have resulted in the los ...
Saturday, 03 September 11
FEW SHIPS REPORTED FIXED FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - The freight market continued the upward trend during last week with BDI up by about 13 pct closing at 1,740 points and cape index up ...
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- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Videocon Industries ltd - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
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