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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, 29 April 10
KANGAROO RESOURCES INKS KEY COAL EXPORT CONTRACT WITH YUDEAN FARNON - PROACTIVE INVESTORS
Proactive Investors reprted that, Kangaroo Resources has secured an initial export sales contract for coal from the company’s operating coal p ...
Wednesday, 28 April 10
UNITED TRACTORS FOCUSES ON MINING AS IT SEEKS TO DIVERSIFY REVENUE SOURCES - JG
The Jakarta globe reported that, PT United Tractors, Indonesia’s biggest heavy-equipment distributor and mining contractor, aims to have its m ...
Wednesday, 28 April 10
DRY BULK MARKET
After a prolonged period of anticipation and a stalled dry bulk market in terms of freight rates, the industry’s benchmark, the Baltic Dry Ind ...
Tuesday, 27 April 10
CAPESIZES UP, PANAMAXES DOWN - BRS
It was Capesizes up, Panamaxes down this week as the latter experienced a correction after its recent gains. Period rates for Panamaxes remain firm ...
Tuesday, 27 April 10
S.KOREA EWP SEEKS 0.520 MILLION TONS OF SUB-BITUMINOUS COAL
COALspot.com: South Korea East West Power Company has called for term bids for supply of Sub-bituminous Coal for Dangjin Thermal Power Pla ...
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- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- The University of Queensland
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
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