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