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