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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, 09 June 11
INDIKA AIMS TO PRODUCE 31 MILLION TONS OF COAL IN 2011 - THE JAKARTA POST
The Jakarta Post, a leading English news paper in Indonesia reported that, PT Indika Energy Tbk, an integrated energy company, is targeting to incre ...
Wednesday, 08 June 11
BAYAN TO DISTRIBUTE RP. 80 ( APPROX. US$ 0.00939850) PER SHARE DIVIDEND
Coal miner PT Bayan Resources Tbk (BYAN), that is controlled by business Dato' Low Tuck Kwong, will distribute Rp80 a share dividend or Rp266.7 bil ...
Wednesday, 08 June 11
CBM PRODUCTION FROM AUSTRALIA, CHINA, INDIA, AND INDONESIA IS EXPECTED TO WITNESS A SIGNIFICANT INCREASE BY 2015
Press Release - According to Global Data (December 2010), CBM production in Australia, China, India, and Indonesia is expected to witness a signific ...
Sunday, 05 June 11
COAL IMPORTS BY CHINA IS LIKELY TO INCREASE - VISTAAR SINGAPORE
COALspot.com - The freight market softened this week except for the BDI and Cape index was up, but even in these sectors the momentum was compared t ...
Friday, 03 June 11
DRY BULK MARKETS RESURGENCE APPEARS TO BE LOSING SOME STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s seems to be losing some steam, despite reports of growing Chinese demand for commodities, especially coal, on the back o ...
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- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- PTC India Limited - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Planning Commission, India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
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