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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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Tuesday, 05 May 09
INDONESIA'S ADARO PAYS $78.6 MLN FOR COAL-BARGING FIRM - REUTERS
INDONESIA's largest coal producer by market value, PT Adaro Energy Tbk, said late on Monday it paid $78.6 million for a 74 percent stake in Orchard ...
Tuesday, 05 May 09
PHILIPPINES SEMIRARA STILL EXPECTS HIKE IN COAL SALES - BUSINESS MIRROR
DESPITE the anticipated soft demand resulting from the prevailing global financial crisis, the country’s largest coal producer Semirara Mining ...
Monday, 04 May 09
VISTAAR SINGAPORE SAYS, THIS MONTH DRY BULK FREIGHT LIKELY TO COME DOWN
COALspot.com (Singapore) - VISTAAR shipping Services Pte Limited of Singapore, said, the beginning of last week started with bit of weakness an ...
Monday, 04 May 09
PNOC-EC TO GROW COAL OPERATIONS - PHILIPPINE DAILY INQUIRER
LISTED firm Philippine National Oil Co.-Exploration Corp. plans to expand its operations this year to ensure the steady supply of coal and fur ...
Saturday, 02 May 09
BUMI'S FIRST-QUARTER PROFIT RISES 21% ON COAL PRICE - BLOOMBERG
PT BUMI RESOURCES, Asia’s biggest exporter of power-station coal, said first-quarter profit rose 21 percent after it earned higher prices for ...
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- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Planning Commission, India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
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- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
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- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
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- Semirara Mining and Power Corporation, Philippines
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- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
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- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
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