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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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Monday, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained ...
Saturday, 18 August 12
BULK FREIGHT MARKETS CONTINUED THEIR DECLINE IN LINE WITH WEAK DEMAND - VISTAAR
COALspot.com - This week also the indices fell on all segments with BDI touching lowest in almost 3 years.
The BDI closed at 714 points down by 7 ...
Thursday, 16 August 12
PUBLIC PRIVATE PARTNERSHIPS CONFERENCE 2012
Press Release - Asia’s Premier Public Private Partnerships Conference 2012 will showcase commercial opportunities for investors and developers ...
Wednesday, 15 August 12
UT GENERATED RP 3.09 TRILLION NET INCOME
COALspot.com - As of June 2012 Indonesia’s heavy equipment market grew 14%, from 8,448 units to 9,618 units (based on UT’s internal mark ...
Tuesday, 14 August 12
SAKARI ENTERED INTO JV IN CAMBODIA TO EXPLORE COAL OPPORTUNITIES
COALspot.com - Sakari joints hands with The Royal Group of Companies in Cambodia to explore and develop coal opportunities throughout the country.
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- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
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