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