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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, 12 August 10
ETA STAR INDIA PUTS FORWARD COAL MINING PLAN FOR TETE, MOZAMBIQUE, IN 2011
ETA Star India Projects Pvt, which is carrying out coal prospecting and surveying work in the Moatize coal region, in Tete province, will present it ...
Thursday, 12 August 10
SUPRAS WERE FIXED IN THE MID/HIGH TEENS FOR INDO-INDIA TRIPS - FEARNBULK
Handy
Activity is gradually picking up in the Atlantic with more enquiries seen for short period tonnage for the end of August. With the grain sea ...
Thursday, 12 August 10
INDONESIAN COAL PRICE REFERENCE REACHED US$ 94.86 FOR AUGUST 2010 SUPPLIES
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Wednesday, 11 August 10
BRAZILIAN GIANT VALE LOOKING TO BOOST ITS COAL OUTPUT
BRAZILIAN mining giant Vale is not content with being the world's largest iron ore miner. The miner is banking on ambitious growth plans to see it ...
Wednesday, 11 August 10
CAPESIZE MARKET ON RECOVERY MODE
The dry bulk market, usually dormant in August, has returned on a high note this week, after last week’s gains. Monday proved to be rather buo ...
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- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- The University of Queensland
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
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