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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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Wednesday, 25 November 20
DRY BULK SHIPPING: CHINA REMAINS THE DRIVING FACTOR, BUT COAL POLICY IS DISRUPTING THE MARKET - PETER SAND, BIMCO
The second half of the year has provided some cheer for the dry bulk market, with all ships in the spot market averaging earnings above the break-e ...
Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
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- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Deloitte Consulting - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
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