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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, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
Sunday, 29 April 12
THE FREIGHT MARKET EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The BDI continued to go up with the support of Panamax/Supramax and was up by 8.34 pct closing at 1,156 points.
The cape index was ...
Sunday, 29 April 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS FOR MAY 2012 DELIVERY WAS STABLE THIS WEEK
COALspot.com - Indonesian sub-bituminous coal swaps for May deliveries stable this week, according to DSP of SGX AsiaClear OTC Coal Swaps. In the me ...
Friday, 27 April 12
BUKIT ASAMS NET INCOME UP 14% IN 1Q 2012 (UNAUDITED)
Press Release - PT Bukit Asam (Persero) Tbk, announced the Consolidated Financial Statements and Subsidiaries per 31 March 2012 (Unaudited).
Reve ...
Thursday, 26 April 12
AUSTRALIAS COKAL EXPANDS MET COAL POTENTIAL INTO WEST KALIMANTAN
COALspot.com - Global metallurgical coal group Cokal Limited (Cokal) (ASX:CKA) announced today it has completed the acquisition of 75.2% of PT Silan ...
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- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Australian Coal Association
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- The University of Queensland
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
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