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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, 10 August 16
THE INDONESIAN DRAFT NEW MINING LAW - AMENDMENTS TO THE 2009 MINING LAW
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
Tuesday, 09 August 16
CS50 COAL INDEX HITS NEW FIFTY-WEEKS HIGH
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 1.78% week over week to averaging $41.85 per ton this past week, shows CS (i) C ...
Tuesday, 09 August 16
HARD COAL PRODUCTION AND WORLD TRADE ON THE DECLINE FOR THE FIRST TIME IN YEARS - VDKI
Hard coal production and world trade on the decline for the first time in years – not a harbinger of a global energy turnaround
Worldwid ...
Tuesday, 09 August 16
BREXIT, BRITANNIA AND THE WAVES - TREVOR CROWE, CLARKSON RESEARCH
This week, the Bank of England put into place its action plan following the UK referendum on 23rd June, which indicated the British population&rsqu ...
Monday, 08 August 16
INDONESIA'S DRAFT MINING LAW HINTS AT FUTURE REGULATORY FRAMEWORK
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
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- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Australian Coal Association
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
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