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