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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, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
Tuesday, 04 January 11
BALI, INDONESIA HOST OF WORLD RENEWABLE ENERGY AND ENERGY EFFICIENCY CONFERENCE
Press Release - Indonesian Renewable Energy Society (METI – IRES) has launched the plan for organizing the international gathering ...
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- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- CNBM International Corporation - China
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Planning Commission, India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
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