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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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Sunday, 10 July 11
DRY BULK MARKET SHOWING SIGNS OF IMPROVEMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Stronger Capesize demand has helped propel the dry bulk market forward this week, with the Baltic Dry Index (BDI) ending yesterday’s session u ...
Sunday, 10 July 11
INDONESIAN BAYAN RESOURCES TO SUPPLY 100 MILLION TONS OF COAL TO INDIAN UNIVERSAL SUCCESS ENTERPRISES LIMITED
Coal miner PT Bayan Resources Tbk (BYAN), that is owned by Dato' Low Tuck Kwong, has entered into a conditional sales and purchase agreement to sup ...
Thursday, 07 July 11
BELOW 5100 COAL WILL BE BANNED FOR EXPORT BY 12 JANUARY 2014
COALspot.com - Indonesian government is in the process of drafting an amendment for government regulation 23/ 2010.
GR 23/2010 has issued to sup ...
Wednesday, 06 July 11
ATLAS RESOURCES TO OFFLOAD 17 PERCENT IPO - INSIDER STORIES
Coking and thermal coal miner PT Atlas Energi Resources aims to offload 17percent new shares of its enlarged capital after Eid-Fitri holidays, as qu ...
Tuesday, 05 July 11
UNTR REVISES UP SALES TO 7,500 UNITS - INSIDER STORIES
PT United Tractors Tbk (UNTR), distributor of Komatsu heavy equipment and parent of PT Pamapersada Nusantara, has revised up its equipment sales tar ...
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- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Ministry of Mines - Canada
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