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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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Wednesday, 02 February 11
HUGE TONNAGE OVERSUPPLY LOOMING FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market taking another dive yesterday, to just over 1,000 points (1,084), losing more than 2% on the day, it’s more than obvi ...
Monday, 31 January 11
S. SUMATRA COAL RAILWAY TO BE COMPLETED ON SCHEDULE - THE JAKARTA POST
The Jakarta Post reported that, despite land acquisition problems, state coal mining company PT Bukit Asam is upbeat that the development of a railw ...
Monday, 31 January 11
COAL MINER PTBA TO DRIVE OUTPUT WITH ACQUISITIONS - THE JAKARTA GLOBE
The Jakarta Globe reported that, State coal company Perusahaan Tambang Batubara Bukit Asam said its output would increase 34 percent to 17.6 million ...
Saturday, 29 January 11
PRESSURE ON SHIPPING MARKET MAY CONTINUE UNTIL MID FEBRUARY 2011
COALspot.com - The BDI continues to drop and saw a drop of about 5 pct this week closing at 1370 points.
In May 2010 the BDI touched 4,209 ...
Saturday, 29 January 11
ANTAM ACQUIRES SAROLANGUN COAL MINING
According to Insider Stories, Nickel and gold miner PT Aneka Tambang Tbk (Antam) of Indonesia via its subsidiary PT Indonesia Coal Resources (ICR) h ...
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- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
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