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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 February 13
NEWCASTLE PORT COAL SHIPMENTS DROPPED BY 10.77 PERCENT W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,412,497 MT of thermal and coking coal for week ended 0700 hours 4 February 2013, Newca ...
Tuesday, 05 February 13
CHALLENGER DEEP RESOURCES CORP HAS ENTERED INTO AN EXCLUSIVE MINING AND MARKETING AGREEMENT WITH KEM
COALspot.com - Challenger Deep Resources Corp., through its wholly owned subsidiary, PT Bestindo Energy, has entered into an Exclusivity Agreement r ...
Saturday, 02 February 13
ADARO TO INTRODUCE A NEW BRAND OF ENVIROCOAL, E4700, IN 2013
COALspot.com - Adaro Energy, an Indonesian and leading coal producer in country has achieved a record coal production during 4Q12 of 13.31 mil ...
Saturday, 02 February 13
FREIGHT MARKET MAY REBOUND AFTER CHINESE NEW YEAR - VISTAAR
COALspot.com - The freight market was soft and all the indices were down by around 5-7 pct this week.
The BDI was down 6.01 pct closing at 750 po ...
Friday, 01 February 13
ORPHEUS SELLS B26 COAL PROJECTS FOR US$ 2 MILLION TO FOCUS ON SOUTH KALIMANTAN
COALspot.com - Orpheus Energy Limited (ASX: OEG) has announced that it has sold its 51 percent equity stake in the East Kalimantan coal projects, Bl ...
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- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Economic Council, Georgia
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Australian Coal Association
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
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