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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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Friday, 12 November 10
BANPU'S NET PROFIT HAS INCREASED 249 PERCENT IN 3Q 2010 COMPARED TO THE SAME PERIOD LAST YEAR
COALspot.com: Banpu Public Company Limited (BANPU) reports its financial performance for the third quarter 2010, posting a net profit of THB 13,293 ...
Friday, 12 November 10
DRY BULK MARKET STILL ON A FREEFALL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market failed to show any signs of life this week, with the Baltic Dry Index (BDI) still being on the red, now stretching more than 11 ...
Thursday, 11 November 10
KOMIPO WANTS 400KT OF SUB BITUMINOUS COAL
COALspot.com : Korea Midland Power Co. Ltd. (KOMIPO) is looking for 400,000 MT of sub bituminous coal through International open bidding. The delive ...
Wednesday, 10 November 10
NTPC TO IMPORT 12 MILLION TONS OF COAL IN 2011
COALspot.com: India's State Trading Corp Ltd a public sector Govt of India co. is looking for 12 million tones (+/- 2%) of imported coal for NTPC. ...
Tuesday, 09 November 10
NOBLE GROUP APPOINTED AS THE EXCLUSIVE MARKETING AGENT FOR PT. BERAU COAL
COALspot.com: Noble Group Limited has recently been appointed as the exclusive marketing agent for PT. Berau Coal production exported to internation ...
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- London Commodity Brokers - England
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- The University of Queensland
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
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