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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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- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Australian Coal Association
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
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